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Leucadia National Boosts Stake in HomeFed Corporation (HOFD) Following an Agreement

In a new filing with the Securities and Exchange Commission, Leucadia National, managed by Ian Cumming and Joseph Steinberg, revealed boosting its stake in HomeFed Corporation (OTCMKTS:HOFD) to 9.46 million shares, from some 2.47 million disclosed in an earlier filing from February. In this way, the stake currently amasses 63.6% of the HomeFed’s outstanding stock, versus 31.40% held earlier.

Leucadia National Corp. (NYSE:LUK)

In another filing, HomeFed Corporation (OTCMKTS:HOFD), a company involved in the development of residential real estate projects in California, announced that last week it completed the acquisition of some real estate subsidiaries and investments from Leucadia, including around $12.5 million cash. Under the terms of the deal, Leucadia received approximately 6.99 million new unregistered shares of its common stock. HomeFed also plans to purchase the balance of the real estate investment in exchange for some 514,700 new shares at a deferred closing during the second quarter of 2014. In this way, following the full completion of the deal Leucadia will hold 65% of the outstanding common stock of HomeFed Corporation (OTCMKTS:HOFD). However, the investor will limit its voting rights and will not hold a majority voting interest in the company.

HomeFed Corporation (OTCMKTS:HOFD)’s stock gained over 32% since the beginning of the year, surging significantly amid the announcement about the agreement with Leucadia. It trails a P/E of 33.xx, which is higher than the average P/E among all property management companies of 28.xx. Leucadia National Corp. (NYSE:LUK)’s stock on the other hand, edged down by around 2%, mainly on the back of weak financial results such as the decline in terms of EPS from continuing operations to $0.01 in the fourth quarter of 2013, from $1.85 a year earlier.

A couple of weeks ago, Leucadia acquired a total of 23.0 million shares of Phil Falcone‘s Harbinger Group Inc (NYSE:HRG), which sold its own stock. Moreover, Leucadia holds a significant position in INTL Fcstone Inc (NASDAQ:INTL), which amasses 918,000 shares, valued at $16.98 million.

Disclosure: none

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